Wednesday, February 23, 2011

As a Share of Income, Clothing and Footwear in U.S. Are More Affordable Today Than Ever Before

Americans spent almost $338.1 billion on clothing and footwear in 2010 (data here), which as a share of disposable personal income (data here), was the lowest ever in U.S. history, at only 2.97%. Spending on clothing as a share of income has fallen in 21 out of the last 23 years, from 4.78% in 1988 to less than 3% in both 2009 and 2010. Compared to 1950 when spending on clothing was 9% of income, spending last year was less than one-third that amount, and compared to spending on clothing of 6% of income in 1970, spending last year was half of that share.

In other words, clothing is now cheaper than at any time in history, when measured as a share of disposable income. And there's a better selection of clothing now, at higher quality, and with options available today like no-iron fabrics and washable silk that have become increasingly available in recent years. And when it comes to footwear, I don't think anybody would argue that the selection and quality today are far ahead of past decades - just think of the athletic footwear options today vs. Chuck Taylor Converse All-Stars, which were at one time "state-of-the-art" and were only available in two colors (black and white) until 1966.

Bottom Line: As a direct result of increased global competition, advances in technology, and increased worker productivity, clothing is cheaper today both in inflation-adjusted prices and as a share of disposable income. We have more clothing today per person than any previous generation (think of the number and size of closets in a typical 1930s, 1940s or 1950s era home), and the clothing and footwear are cheaper and better than ever, contributing to an ever-increasing rising standard of living for the average American.

"I don't think anybody would argue that the selection and quality today are far ahead of past decades"

Let me preemptively point out what will be said on this momentarily.

You're wrong. The quality has decreased. There's probably some hormones injected into those shirts. A shirt in 1930 would last you 15 years. Today it falls apart after washing it 5 times.

Plus, the portions are getting bigger. A "medium" in 1930 was the equivalent of an XS today. Companies are cheating us through packaging gimmicks, and government lies do not capture these attempts to fool us.

How are things getting cheaper is a shirt in 1930 would last 15 years, while now it lasts 1 year? Lies I tells ya!

Plus, on a trip to Thailand, I saw that shirts there were only 20 cents, and...I don't know I lost my train of thought.

:) Oh my goodness! I should be a psychic for predicting so accurately what would be said here. I have amazed even myself.

I await Vangel's reply on how the same shirt in China costs 10 times less than in America due to the fact that America is simply not competitive anymore and because China has an overall larger GDP...propelled mainly by trains, bridges to nowhere and fancy sculptures on airport ceilings. (because thats one heck of a solid Libertarian argument to make!)

"We are all saying that adjusted for inflation, eggs and clothing are cheaper than ever."

no, that's not what you are saying. the clothing figure is relative to disposable income, not inflation.

persist in making such rudimentary errors and it is you who need to worry about egg on your face.

regarding eggs, claiming they have underperformed inflation is not terribly meaningful. as the 6 or 7 other breakfast commodities i linked to demonstrate, eggs are not typical. you can always cherry pick a commodity if you look long enough, but most of the others (and the commodity indexes) all disagree.

using eggs to stand for food is like my claiming health care costs stand for all services.